Commission Staff Provides Comments to FDA on Whole Grain Labeling Statements; FTC Issues Notice of Proposed Rulemaking on DNC Registry Fee Changes

For Your Information

Petition to reopen set aside Commission decision and order: The Commission has received a petition from Johnson & Johnson (J&J) Corporation, requesting that the FTC reopen and set aside the decision and order concerning J&J’s proposed acquisition of Guidant Corporation (Guidant). In the petition, J&J has requested that the Commission ask that the entire final order in this matter be set aside, as there has been a material change in fact and circumstances that renders the provisions of the order unnecessary – J&J has terminated all agreements with Guidant regarding the proposed transaction, and the Commission has subsequently approved Guidant’s acquisition by Boston Scientific Corporation.

The Commission is accepting public comments on the petition for 30 days, until May 27, 2006. Comments should be send to: FTC, Office of the Secretary, 600 Pennsylvania Ave., N.W., Washington, DC 20580. J&J has, however, requested that the public comment period be eliminated. If the Commission approves this request, the comment period may be terminated at any time. (FTC File No. 051-0050; the staff contact is Roberta Baruch, Bureau of Competition, 202-326-2861; see press release dated November 2, 2005.)

Approval of petition for proposed divestiture: Following a public comment period, the Commission has approved a proposed divestiture by The Procter & Gamble Company (P&G) related to its recent acquisition of The Gillette Company (Gillette). Under the terms of the decision and order in this matter, which was issued to resolve competitive concerns raised by P&G’s acquisition of Gillette, P&G is required to divest assets in several businesses that overlapped with Gillette to ensure that competition is maintained following the merger. In the petition, P&G requested Commission approval to divest its Antiperspirant/Deodorant (APDO) assets, as that term is defined in the order, to The Dial Corporation, a subsidiary of Henkel KGaA. The brands being divested include: Right Guard, Soft & Dri, Dry Idea, Natrel Plus, and Balance.

The Commission vote to approve the petition was 2-0, with Chairman Deborah Platt Majoras not participating and Commissioners Pamela Jones Harbour and William E. Kovacic recused. (FTC File No. 051-0115, Docket No. C-4151; the staff contact is Roberta Baruch, Bureau of Competition, 202-326-2861; see press releases dated September 30, 2005 and February 28, 2006.)

Issuance of staff comments to the Food and Drug Administration: The Commission has authorized the staffs of the Bureau of Consumer Protection, Bureau of Economics, and Office of Policy Planning to file comments with the U.S. Food and Drug Administration (FDA) concerning the FDA’s recently issued draft guidance for industry and agency staff on labeling statements about the whole grain content of food products. The 2005 Dietary Guidelines for Americans, issued by FDA and the Department of Health and Human Services (HHS), include a new and greater emphasis on whole grains as a way to reduce the risk of chronic diseases and manage weight, and for the first time contain a specific recommendation that people “consumer 3 or more ounce-equivalents of whole grain products per day.” U.S. Department of Agriculture (UDSA) consumption data suggests, however, that Americans are falling far short of these dietary recommendations.

The FDA’s “Draft Guidance for Industry and FDA Staff: Whole Grain Label Statements,” a question and answer format document, is designed to clarify what grain the FDA considers to be legitimately “whole grain.” It also provides guidance on the types of label statements it will allow to describe the whole grain content of food products. It indicates that companies may make factual, quantitative statements, as long as the statements are not false or misleading and do not imply a particular level of a grain ingredient. Claims should not imply, for example, that the food is “high” in whole grain or that a food is an “excellent source” of whole grain.

The FTC staff generally supports FDA’s guidance and believes it will be helpful in clearing up some of the inconsistency and uncertainly about how whole grain foods are marketed. The FTC staff believes, however, that both industry and consumers would benefit if FDA expanded on its guidance. Specifically, the staff recommends that FDA: 1) reconsider allowing “good source” and “excellent source” claims or suggest alternative permissible ways companies could provide the context that consumers need to help them get their three or more daily whole grain servings; 2) provide additional guidance on the appropriate use of claims such as “100% whole grain,” “whole grain,” and made with whole grain”; and 3) solicit relevant customer perception data and consider conducting copy tests to determine how to best define whole grain-related terms and reduce consumer confusion.

The Commission vote to issue the staff comments was 5-0. Copies are available on the FTC’s Web site as a link to this press release. (FTC File No. V060014; the staff contact is Michelle Rusk, 202 326 3148.)

Commission approval of Federal Register notice: The Commission has approved the publication of a notice of proposed rulemaking in the Federal Register that would amend the Telemarketing Sales Rule to revise the fees charged for industry access to the National Do Not Call Registry. As detailed in the notice, the FTC is accepting comments on the proposed fee changes. Under the proposed new fee structure, the annual fee for each area code of data accessed would become $62, and the maximum amount charged to entities accessing 280 area codes or more would become $17,050. The proposed rulemaking would continue to allow telemarketers to obtain the first five area codes of data for free, and would still allow those entities exempt from the Registry’s requirements to obtain access at no charge. The Commission is, however, requesting comments on whether telemarketers should still be permitted to access a certain number of area codes for free and address the potential impact of a change to this provision.

Telemarketers are required to renew their subscriptions to the National Do Not Call Registry once a year, and must “scrub” their call lists once every 31 days. The Do Not Call Web site for telemarketers (telemarketing.donotcall.gov) will inform them when their subscription account numbers (SANs) expire and give them renewal instructions. To date, consumers have registered approximately 122.6 million telephone numbers on the Registry, which accepts home land line and personal cell phone numbers at www.donotcall.gov or 1-888-382-1222.

The FTC is accepting public comments on the proposed rulemaking until June 1, 2006. Pending public comment, the new fee schedule will go into effect on September 1, 2006. Written comments should refer to “TSR Fee Rule, Project No. P034305” on both the text and the envelope and should be mailed to: Federal Trade Commission/Office of the Secretary, Room
H-135 (Annex D), 600 Pennsylvania Avenue, N.W., Washington, DC, 20580. Comments containing confidential information must be mailed in paper form. The FTC requests that any paper comments be sent by courier or overnight service. Commenters also may submit comments online at https://secure.commentworks.com/ftc-dncfees2006. The Commission vote approving publication of the Federal Register notice was 5-0. (FTC File No. P034305; see related press release issued on April 18, 2005.)

Commission approval of final consent order: Following a public comment period, the Commission has approved the issuance of a final consent order in the matter concerning Valassis Communications, Inc. The vote to approve the final order was 5-0. Copies are available now on the FTC’s Web site as a link to this press release. (FTC File No. 051-0008; the staff contact is Geoffrey M. Green, Bureau of Competition, 202-326-2641; see press release issued March 14, 2006.)

Copies of the documents mentioned in this release are available from the FTC’s Web site at http://www.ftc.gov and from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, DC 20580. Call toll-free: 1-877-FTC-HELP.

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